Regulatory Environment

The Labor Law was revised and adopted in July 2021 and became effective from 1 January 2022. The Labor Law is the key legislation regulating employment relationships in Mongolia.

The Labor Law has a territorial application and applies to employment relationships arising from work performed or services provided in the territory of Mongolia.

Employment Contracts

The employment contract must contain the job title, work and duties to be performed as specified in the job description, place of work, remuneration, and working conditions. The contract can be concluded either for an indefinite term or a fixed term (subject to certain conditions).

Types of Employment Contracts

Under the revised Labor Law, there are eight specific types of employment contracts recognized in Mongolia:

Probation Period

The probation period is up to 3 months, subject to a potential extension of up to another 3 months as agreed by the parties. The key purpose of the probation period is for an employer to test/verify whether the employee meets the requirements of the job position.

Working Hours & Rest

The Labor Law firmly sets standard working hours and overtime limitations to ensure worker well-being.

Annual Leave & Public Holidays

• Minimum Annual Leave: 15 business days.
• Special Cases: For minors and employees with disabilities, the minimum annual leave is 20 business days. Depending on the length of employment, additional days are granted.
• Public Holidays: An employee is entitled to take paid public holiday leaves.

Salary & Remuneration

Salary consists of base salary, extra pay, additional pay, bonuses, and annual leave salary. The base salary is agreed by parties of employment contracts but must not be lower than the national minimum wage. Salary must be paid in the national currency (MNT) in two installments on fixed days monthly.

Parental Leaves

Mongolia provides robust parental leave protections for new parents.

• Maternity Leave: 120 days (140 days for mothers who gave birth to twins). Maternity benefits are calculated based on the average salary of the last 12 months and paid by the Social Insurance General Office for 4 months. The employer is obliged to retain the employee's position and pay employer social insurance contributions during this time.
• Paternity Leave: Leave for new fathers is 10 business days.
• Childcare Leave: An employee with a child under 3 years old, regardless of gender, is entitled to take childcare leave until the child reaches 3 years of age.

Employment of Foreign Nationals

Employment of foreign nationals is regulated by the Labor Law, Labor Migration Law, and Law on the Legal Status of Foreign Citizens. According to the Labor Migration Law, the foreign employee quota per economic sector is annually determined by the Cabinet.

As of the first quarter of 2023, 5.7 thousand foreign citizens from 99 foreign countries were working in Mongolia. The number of foreign workers increased by 1.8 thousand (45.6%) from the previous quarter, with the largest change observed in the construction sector (an increase of 422 foreign employees, or 2.8 times).

In relation to the employment of foreign nationals, the local employer is required to pay a workplace fee equal to 2 times the minimum wage on a monthly basis. Furthermore, the local employer is responsible for paying the employer's contribution as well as withholding and reporting social and health insurance premiums monthly.

2023 Quota for Foreign Employees by Sector

Actual Number of Foreign Workers by Sector (Q1 2023)